TikTok deal likely to leave US data leaking to China

TikTok users would still risk having personal data exposed to hacking and espionage by China even if the Biden administration forges a security agreement designed to spare the video platform from a total US ban.

That’s the conclusion of former national security officials and other experts as the Justice Department reviews an accord that would keep the popular video-streaming app, which is owned by China’s ByteDance Ltd., accessible to its millions of US users.

TikTok has been under US scrutiny since 2019 over concerns that Chinese actors might tap those users’ information for espionage or other harmful purposes.

“They built the whole system in China,” said Stewart Baker, a national security lawyer at Steptoe & Johnson LLP. “Unless they’re going to rebuild the system in the United States at great expense, sooner or later, when something goes wrong, there’s going to turn out to be only one engineer who knows how to fix it. And he or she is likely to be in China.”

This analysis of the agreement is based on interviews with former national security officials, lawyers who have worked on similar deals and experts who have studied data security, social media platforms and telecommunications companies. There’s no indication a decision has been made.

Brooke Oberwetter, a TikTok spokesperson, said that while the company would not comment on the specifics of its discussions with the US government, “We are confident that we are on a path to fully satisfy all reasonable US national security concerns.”

TikTok is routing all its US user traffic through servers maintained by Oracle Corp. and the database giant is auditing the app’s algorithms. Still, additional restrictions on how US user data is stored and accessed will be necessary — and might not resolve US security concerns no matter how strong a deal looks on paper, the experts said.

Senator Mark Warner, the Virginia Democrat who chairs the Senate Intelligence Committee said he’s aware of conversations around TikTok and couldn’t give details. Nonetheless, he said the company has “a big mountain to climb with me to prove the case that it can really be safe.”

Warner said China has a bad track record on protecting users’ privacy. “They’ve shown repeatedly the ability to create this surveillance state that ought to scare the dickens out of all of us.”

He added that it’s much harder today to wall off TikTok’s data technically or ban it outright than it was five or six years ago as the popularity of the app has surged.

While TikTok’s owner ByteDance has tried to distance itself from Chinese state influence, President Xi Jinping has launched a sweeping crackdown on the private enterprises,

particularly in the tech sector.

The video-streaming app, which has about 1 billion users but is banned in China, has been under scrutiny by US officials since 2019, when the Committee on Foreign Investment in the US began reviewing a merger between ByteDance and Musical.ly.

The Biden administration re-opened a national security review of TikTok after former President Donald Trump stopped short of banning the app in an effort to broker a deal to sell the platform to a US buyer, which never came to fruition. ByteDance had sought US approval to sell a stake in the app to Oracle and Walmart Inc., but the transaction didn’t materialise. A US court blocked efforts by the Trump administration to boot TikTok from app stores operated by Apple and Alphabet Inc.’s Google.

Cfius, which is chaired by the Treasury Department but includes members from across the government, has the power to reject or modify transactions involving foreign companies that purchase US entities.

TikTok Chief Operating Officer Vanessa Pappas said the firm has strict controls over access to data and where it’s stored, and that the firm wouldn’t give that data to the Chinese government.

She said that the company will continue cooperating with federal agencies to secure US data and said a final agreement “will satisfy all national security concerns.”

—Bloomberg